The Rational Reminder Podcast Decision Making: Mental Models, Knowing Your Variables, and Achieving Positive Outcomes With Shane Parrish (EP.19)
8 snips
Nov 7, 2018 
Shane Parrish, creator of the Farnam Street Blog, discusses mental models for investing, the importance of decision journals, the value of doing nothing, defining happiness, and the power of rereading books for deeper understanding in this peaceful and informative podcast.
AI Snips
Chapters
Transcript
Episode notes
Mental Models
- Mental models are representations of how things work, like gravity, which help us think forward and backward.
- Having more relevant mental models helps us better understand reality and avoid blind spots in decision-making.
Harmful Biases
- Overconfidence and the bias for action are harmful to investors, often leading to unrewarded risks.
- Every trade signals overconfidence, requiring thorough understanding and consideration of opposing views.
Importance of Process
- Process is crucial in investing because it helps calibrate decisions and identify knowledge gaps.
- A consistent process allows for feedback, adaptation, and knowledge transfer within teams and individually.